Shahzad Bhatti Welcome to my ramblings and rants!

January 10, 2022

Promise of Web3 and Decentralization

Filed under: Encryption,Web3 — admin @ 8:59 am

Web3 term was coined by Ethereum co-founder Gavin Wood to distinguish it from Web2 architecture. The Web2 architecture popularized interactive and interoperable applications, where Web3 architecture adds decentralization based on blockchain for protecting user data and privacy. I came across a number of recent posts [1, 2, 3, 4] lately that question the claims of Web3 architecture including a latest blog from Moxie. As a co-founder of Signal protocol and strong cryptography background, Moxie makes following observations:

  • People don’t want to run their own servers, and never will.
  • A protocol moves much more slowly than a platform.

Moxie shares his experience of making dApps: Autonomous Art and First Derivative and reaches following conclusions:

  • NFT marketplace looks similar to centralized websites and databases instead of blockchain based distributed state.
  • The blockchain lack client/server interface for interacting with the data in a trustless fashion.
  • The dApp clients often communicate with centralized services such as Infura or Alchemy and lack client side validation.

Moxie identifies following security gaps in NFT use-cases:

  • Blockchain does not store data for NFT, instead it only points to URL and it lacked hash commitment for data located at the URL.
  • Crypto wallet such as MetaMask connects to central services such as Etherscan and OpenSea without client-side validation.

Moxie claims that innovations at centralized services such as OpenSea are outpacing standards such as ERC-721 similar to GMail compared to Email standards. He claims that decentralization has a little practical or pressing importance to the majority of people who just want to make money. In the end, he concludes:

  • We should accept the premise that people will not run their own servers by designing systems that can distribute trust without having to distribute infrastructure.
  • We should try to reduce the burden of building software because distributed systems add considerable complexity.

Moxie raises valid concerns regarding the need for thin clients that can validate blockchain data with trustless security as well as the use of message authentication code and metadata when creating or accessing NFT. However, he conflates Bitcoin, Ethereum, and Blockchain and there are existing standards such as Simplified payment verification that allows users to connect to Bitcoin blockchain without running full-node. Due to differences in Ethereum architecture, thin clients are difficult to operate on its platform but there are a number of alternatives such as Light Clients, Tendermint Light, Argent Wallet and Pockt Network. The NFT data can be stored Fleek or decentralized storage solutions such as IPFS, Skynet, Sia, Celestia, Arweave and Filecoin. Some blockchains such as Tezos and Avax also offer layer-1 solution for data storage. Despite the popularity of Opensea with its centralized access, a number of alternatives are being worked on such as OpenDao and NFTX. Further, NFT standards such as ERC-2981 and ERC-1155 are in work to support royalties and other enhancements.

When reviewing Signal app, I observed that Moxie advocated centralized cryptography and actively tried to stop other open source projects such as LibreSignal to use their servers. Moxie also declined collaboration with open messaging specifications such as Matrix. Centralized cryptography is an oxymoron as truly secure systems don’t require trust. The centralized messaging platforms such as WhatsApp impose forwarding limit, which require encryption of multiple messages using the same key. Despite open source development of Signal app, there is no guarantee that it uses the same code on its infrastructure (e.g. it stopped updating open source project for a year) or it doesn’t log metadata when delivering messages.

Though, Moxie‘s experience with centralized services within the blockchain ecosystem highlights a crucial area of work but a number of solutions are being worked on, admittedly with slow progress. However, his judgment is clouded by his prior position and beliefs where he prefers centralized cryptography and systems over decentralized and federated systems. In my previous blog, I have discussed the merits of decentralized messaging apps, which provide better support for data privacy, censorship, anonymity, deniability and confidentiality with trustless security. This is essential for building Web3 infrastructure and more work is needed to simplify development and adoption of decentralized computing and trustless security.

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